Initialisms are distinguished from acronyms in that initialisms are pronounced as individual letters, while acronyms are pronounced as if the letters spelled out a word (which they may in some cases do). As Encarta says, "Acronyms are initialisms that have become words in their own right." [1] The use of the word "acronym" to include initialisms is increasingly accepted.

Both initialisms and acronyms are defined by custom; sometimes they do not strictly follow the rule of using every initial, or only the first initial. Unimportant words may be omitted. In the case of acronyms a certain amount of creativity may be employed.